phar lap and subarus, page-8

AUD keeps falling while gold in USD looks very good, so we now have $AUD1437/ounce. Yummy.

Could we have gold $AUD1500 by end June 2010?

The market will wake up and discriminate between gold equities and other shares. My main concern is that PE ratios will fall for all equities in a major market downturn due to heightened risk aversion.

Waiting for the collapse of gold equities before buying them is being very optimistic in the light of worldwide market concerns about the solvency of banks and governments. Gold is only a small part of total world assets, so as other asset values fall it only takes a small portion of those funds to transfer into gold for there to be a major rise in its price.

I am sure the gold price will move around - we need to take that into account. In any case most producing goldies I invest in reflect a lower price than the current price of gold.

loki (a gold and goldie optimist, despite Dennis Gartman's recent view)